Drax has agreed to acquire three battery projects from Apatura Limited totalling 260MW.
The two of the ‘ready-to-build’ sites are in Scotland and one is in Northern England.
Construction on all three sites is expected to commence in 2026. One site in Scotland is due to be operational in 2027, with the second and third sites following.
Apatura will manage the development of the projects and bear the majority of the construction risk (cost and delay), reflected in the fixed cash consideration and contractual protections. Drax will pay a fixed amount of £157.2 million in staged payments between 2025 and 2028, reflecting construction milestones and including payments to Apatura linked to their delivery of the projects.
Linked to the transaction, Drax has agreed the option of a right of first offer over a further eight sites totalling 289MW being developed by Apatura.
Drax said there isl a growing need for dispatchable power and system support services, “creating long-term earnings opportunities for, and value from, the Group’s FlexGen portfolio”. The 1.8GW FlexGen business currently comprises pumped storage, hydro and open cycle gas turbines (OCGTs), It also has access to demand side flexibility through the Group’s Industrial & Commercial customer portfolio. But it has no batteries, which offer fast response capabilities. Drax said that two-hour batteries provides as an attractive entry point into the short duration storage space and are complementary to the Group’s FlexGen business.